Question

If inflation begins to rise rapidly, which step is the Federal Reserve likely to take?

Decrease the federal funds rate.

Increase the reserve requirement.

Buy government securities.

Decrease the discount rate.

Answer 1

The country has entered a period of economic growth, but prices are rising too rapidly. To stabilize prices, the Federal Reserve decides to

decrease the federal funds rate

decrease the reserve requirement

raise the discount rate

buy more government securities

Answer 2

for the first one I would go with b
and the second one I would go with c

Answer 3

Hello,

I agree with both of your answer choices.

\(\qquad{}\)Although for question one, it is more likely that the government you raise the interest rate. (Though that option is not available.)

Peace.